PERSPECTIVES

From The Co-Founders

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Tips, Tactics & Strategic Insights and Commentary
from The ROI Co-Founders, Pat Johnson and Dick Outcalt
Outcalt & Johnson: Retail Strategists LLC; Retail Turnaround Experts

The Clock Is Ticking…

Christmas is two weeks away.

Time to focus on the “science” part, the numbers part, of “the art and science of inventory management.” The march has begun toward a vital, critical touchstone – your 12/31 targeted ending inventory level.

On that date, you must have appropriate inventory levels and mix for the months ahead – plus the cash to pay for it!

This is the moment an “ending inventory enforcer” must step up. 

Periodically it’s more essential than normal for business owners to interrupt their routine and get a good look at their upcoming financial choices.

And this is one of those times!

Many very savvy people are quite concerned about the economy and consumer behavior right now.

  • High debt maturing in both the real estate and the public sectors.

  • The multiple international upheavals that continue to grow.

  • And, certainly, the impending changes at the Presidential and Congressional level in the U.S

These issues are joined by others to make NOW a very important time for business owners to look ahead financiallymaybe weekly for a while. 

Ahh yes, yet another flexibility test. The first quarter of 2023 was full of some major events, nationally and internationally, that disrupted many business plans.

As you contemplate where you are now with your retail operation, compared to where you intended to be, don't despair! Even more important, just like you do with the GPS system in your car, disregard "returning to the prescribed route."

This is retail, after all. Change is the name of the game!

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There's a very important annual job for you, the owner, and all of your senior staff. It's vital, and it involves your presence.

The pressures are mounting on your stores, and in particular, your front line staff. 

  • Noticed all the "help wanted" signs in stores, coffee shops, restaurants? It's not just you; lots of (other) businesses are having a tough time with finding and keeping good help. 

    In fact, a nearby McDonald's posted a notice on its front door acknowledging that they were understaffed due to no-shows, and encouraging (imploring?) customers to be considerate to the people behind the counter who are there to serve them.

     
  •  Meanwhile, the deadlines for online orders to arrive before Christmas are fast approaching. This will lead to a surge in in-store shoppers. And more demands on your front-line staff.

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In the free enterprise system, owners are free to succeed. And free to fail. 

That's why The Retail Owners Institute has defined the #1 responsibility of the Owner as the survival of the business. 

But then, the owner must define "Why?" Why are we doing this, anyway? Why are we working so hard for this business to survive and thrive?

  • There are many good answers. To be the biggest? The fastest growing? A way of life? Something to pass on to the next generation? To create wealth? To support a cause? 
     
  • It all depends on the owner, and what she or he decides. Then, that answer must be communicated: to staff, customers, family, the community, competitors, everyone.  

That brings us to an event that captured a great deal of attention in the business world last week. 

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Have you seen what the Silicon Valley venture capital firms are saying to the  startup firms they've invested in? 

While it may be tempting to smile and nod approvingly at this dose of business reality, there's a ripple effect to be aware of.

As reported in the May 31 edition of the Wall Street Journal*, "Their advice includes cutting costs, preserving cash, and jettisoning hopes that hedge funds or other investors will swoop in with big checks."  

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Every day, there are all too many headlines of things outside our control. 

  • The war in Ukraine. 
  • The global energy crisis.Inflation. 
  • Rising interest rates. 
  • The falling stock market. 
  • Wildfires. 
  • Droughts. 
  • Supply chain disruptions. 
  • Rising costs. 
  • Crime rates. 
  • Social injustices. 
  • The latest coronavirus variant.
  • And...And...And...

The drumbeat of news about these events is relentless. And wearing. 

While retailers are notably resiliant and optimistic, there IS a limit to how much uncertainty one can continue to take.

Then we discovered that there is a name for all this: VUCA.

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"Retail is a mirror of society."

Yes, Daylight Savings began a couple weeks ago. But it's not just the time on the clocks that changed; the times themselves have substantially changed. 

Followers of The ROI has heard us assert many times that "Retail is a mirror of society." As we reflect on the first quarter of 2022, we are struck by how much has changed in just those three months. And retailers must adapt – yes, again! – to this rapidly changing environment.

Think about it. Consider the assumptions you made just a few months ago, in late December and early January about 2022.